natural gas builds maryland’s economy...manufacturing is also an important business sector for the...

1 www.consumerenergyalliance.org

THE VOICE OF THE ENERGY CONSUMER

Natural Gas Builds Maryland’s Economy

More than crab cakes and colonial history, Maryland is a state on the move. Its diverse manufacturing sector is

responsible for churning out a range of products from computer equipment to chemicals. In 2017, the Port of

Baltimore handled 38.4 million tons of cargo, valued at $53.9 billion,1 and almost 69,000 passengers passed

through BWI Marshall Airport daily in 2016.2 One thing is for sure, none of this would be possible without the

clean, abundant and affordable natural gas that has saved Maryland’s families and businesses more than $8.5

billion between 2006 and 2016.3 Whether through business and commerce or at home, when we turn on our

lights or even our heaters this winter, we depend on this energy source.

Access to energy supports just about everything we do

across Maryland, and should not be taken for granted.

It is not just important for businesses, but also for

families, to work with our local and state governments to

guarantee that future Marylanders are able to continue

to count on domestic energy and the pipeline networks

that deliver it to our homes and businesses.

Affordable Energy for Maryland

Sadly, many American families struggle daily to pay for

rising energy costs. According to a 2015 survey by the

U.S. Energy Information Administration, nearly one-third

of American households struggled to pay their energy

bills to light, heat and cool their homes. The survey found

that roughly “one in three households reported reducing

or forgoing basic necessities like food and medicine to pay an energy bill, and 14 percent reported receiving

a disconnection notice for their energy service. Households also used less energy than they would prefer to

– 11 percent of households surveyed reported keeping their home at an unhealthy or unsafe temperature.”4

On average, each resident of Maryland spent $2,925 to meet their energy needs in 2016.5 With 9.3 percent of

the population living at or below the poverty line, this translates to at least roughly one-quarter of their income

In 2017, the Port of Baltimore handled 38.4 million tons of cargo, valued at $53.9 billion,1 and almost 69,000 passengers passed through BWI Marshall Airport daily in 2016. One thing is for sure, none of this would be possible without the clean, abundant and affordable natural gas that has saved Maryland’s families and businesses more than $8.5 billion between 2006 and 2016.



going toward energy expenses.6 7 That’s over 549,000 Marylanders who live in

poverty, enough people to fill Camden Yards a little more than 11 times.8

And it’s not just lower income families that face energy insecurity. Across the nation,

more and more families are living paycheck to paycheck – with little to no savings.

A January 2018 survey by Bankrate found only 39 percent of Americans had $1,000

saved to cover a financial emergency.9 CNBC recently reported that “69 percent

of Americans had less than $1,000 in total savings and 34 percent had no savings

at all.”10

Fortunately, development of affordable energy resources helps benefit the most

disadvantaged among us by reducing the cost of basic necessities such as energy,

freeing up resources to pay for adequate housing, clothing and food.

Fueling Marylanders’ Lives

Supplies of affordable and reliable oil and natural gas are essential to Marylanders’ everyday lives. Ninety

percent of petroleum consumed in Maryland is used for transportation, while industry utilizes another 5 percent.

Almost 50 percent of households within the state depend on natural gas for heating while 10 percent rely on

fuel oil or kerosene. In 2017, natural gas-powered electricity accounted for 20 percent of the state’s power

generation.11

While Maryland is not believed to possess any recoverable oil resources, Allegany, Garrett, and Washington

counties in the western portion of the state sit atop the resource-rich Marcellus natural gas shale formation.

However, in 2017, the Maryland General Assembly authorized a permanent ban on hydraulic fracturing within

the state.

Due to this ban and other circumstances,

Maryland has to rely on supplies of oil

and natural gas transported from the

Gulf Coast and Southwest regions by

pipeline or shipped into Cove Point from

foreign countries overseas. Luckily, low

natural gas prices and an abundance of

domestic resources have helped reduce

the demand for imported gas, giving way

to the transition of Cove Point into an export

facility in early 2018.

$0

$100,000,000

$200,000,000

$300,000,000

$400,000,000

$500,000,000

$600,000,000

$700,000,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Consumer Savings Per Year

Residential Commercial Industrial

Source: Energy Information Administration; calculations developed by Orion Strategies

$4.5BILLION

Maryland residential consumers alone saved more than

$4.5 billion between 2006 and 2016.



Impact of Oil and Natural Gas on Maryland’s Economy

Nationwide, advances in horizontal drilling and hydraulic fracturing have increased production of natural gas

across the U.S., and enabled Maryland consumers to save more than $8.5 billion between 2006 and 2016.

Residential users alone saved over $4.5 billion, and commercial and industrial users saved more than $3.9

billion combined.

According to a PricewaterhouseCoopers study, in 2015 the oil and

natural gas industry contributed 72,500 jobs and accounted for

more than $4.4 billion in wages for the Old Line State. These jobs

represent truck drivers, engineers, rig hands, construction workers and

contractors who make oil and gas production and delivery possible.

Their wages invigorate Maryland’s economy across a multitude of

sectors including real estate, vehicle purchases, local small business

spending and hospitality destinations such as restaurants and hotels. In

total, oil and gas provides over $7.8 billion to Maryland in value-added economic impact, including employee

compensation, proprietors’ income, income to capital owners from property and indirect business taxes.12

Manufacturing is also an important business sector for the Maryland economy, and natural gas plays a critical

role in Maryland manufacturing, with natural gas serving as an essential feedstock to many manufacturing

processes including drying, melting, machine drive and space heating.13 Manufacturing contributed more

than $23 billion to the state’s economy in 2017.14 In 2017, manufacturing accounted for more than 108,000

jobs across the state.15

Access to Energy Resources

Without the availability of its own resources,

energy infrastructure will be a critical piece

to ensure that affordable energy can be

delivered to the state. Unfortunately,

Maryland’s pipeline network and potential

future access to valuable offshore and

onshore energy supplies is under attack by

anti-development activists, who continue

working to eliminate the production and

transportation of safe, affordable sources

of energy. These anti-development efforts

not only harm the environment, but they

$0

$5

$10

$15

$20

2006 2008 2010 2012 2014

Maryland Natural Gas Prices(Per Thousand Cubic Feet)

Residen�al Commercial Industrial

Source: U.S. Energy Information Administration

Combined, commercial and industrial users saved more than

$3.9 billion between 2006 and 2016.

BILLION$3.9



also lack solutions to help meet consumer demand and

threaten our environmental goals.

Rigorous environmental standards and energy

production can and do coexist. From 2000 to 2017,

nationwide emissions of key pollutants have decreased

across the board:

■ 52 percent decrease in nitrogen oxides (NOx) ■ 83 percent decrease in sulfur dioxide (SO2) ■ 19 percent decrease in volatile organic compounds (VOCs) ■ 37 percent reduction in fine particulate matter (PM2.5)16

Additionally, since 2005 the U.S. power sector has reduced carbon dioxide (CO2) emissions by 28 percent.17 In

December 2017, the oil and gas industry announced its Environmental Partnership to further reduce emissions

of methane and volatile organic compounds.18 These improvements are occurring at a time when our country

has catapulted forward to become the world’s leading producer of oil and natural gas.

Since 2006, Consumer Energy Alliance (CEA) has worked to support, and advocate for, the continued

development of oil and natural gas as well as other traditional and alternative energy sources. CEA also

recognizes the vital role that transportation infrastructure like pipelines and transmission lines have on our

communities, as they are critical for moving energy into and throughout Maryland. With the savings that have

occurred in recent years, Maryland’s policymakers, regulators and leaders must come together in support of

access to energy resources and infrastructure development that will help the state continue to thrive, while

also ensuring that hard-working families, seniors, households and small businesses can continue to enjoy the

benefits that low prices are bringing to these communities.

Nationwide, advances in horizontal drilling and hydraulic fracturing have increased production of natural gas across the U.S., and enabled Maryland consumers to save more than $8.5 billion between 2006 and 2016.



1 https://mpa.maryland.gov/Press%20Releases/041218.pdf 2 https://www.bwiairport.com/flying-with-us/about-bwi/facts-figures 3 Calculations developed by Orion Strategies. $852.8 million saved by industrial users, $4.57 billion saved by residential users, and $3.12 billion saved by

commercial users. This number was calculated by using the annual average price per thousand cubic feet of natural gas for residential, commercial, and industrial consumers. This EIA price was then applied to the total MMcf consumed in Maryland, also sourced by EIA. The Consumer Price Index utilized by the Bureau of Labor and Statistics was applied to each year’s price in order to adjust each price to 2016 dollars. 2016 was used as a cutoff date as it was the last year for which residential and industrial data were released.

4 https://www.eia.gov/consumption/residential/reports/2015/energybills/5 https://www.eia.gov/state/seds/sep_sum/html/pdf/rank_pr.pdf6 https://talkpoverty.org/state-year-report/maryland-2018-report/7 Based upon 2018 HHS Poverty Guidelines. https://aspe.hhs.gov/poverty-guidelines8 http://alsd.com/content/camden-yards-undergoing-renovations-2011-season9 https://www.bankrate.com/banking/savings/financial-security-0118/ 10 https://www.cnbc.com/2018/01/18/few-americans-have-enough-savings-to-cover-a-1000-emergency.html 11 https://www.eia.gov/state/analysis.php?sid=MD12 https://www.api.org/~/media/Files/Policy/Jobs/Oil-and-Gas-2015-Economic-Impacts-Final-Cover-07-17-2017.pdf13 http://www.nam.org/Data-and-Reports/Reports/Natural-Gas-Study/Energizing-Manufacturing-Full-Report/ 14 https://apps.bea.gov/itable/iTable.cfm?ReqID=70&step=1#reqid=70&step=1&isuri=1 15 https://www.baltimoresun.com/business/bs-bz-manufacturing-surge-20170127-story.html 16 https://www.epa.gov/air-trends/air-quality-national-summary#emissions-trends 17 https://www.eia.gov/todayinenergy/detail.php?id=3739218 https://theenvironmentalpartnership.org/

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